CHICAGO, Ill. (Reuters) — Slumping demand for meat because of export problems and cold weather boosted pork, beef and chicken inventories to some of their highest levels in years.
Analysts made the observation following the U.S. Department of Agriculture’s monthly cold storage report Feb. 21.
Meat processors and grocers normally stash hams in freezers before the Easter holiday and steaks, pork chops and chicken ahead of the summer grilling season.
However, the USDA report said January’s pork stocks showed their biggest increase for the month since 2012, led largely by the 67 percent jump in hams stored since December.
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Total pork inventories were 596.5 million pounds, up 18 percent from December, which is partly because of increased production but also export disruptions.
The negative effect the report would have had on hog futures was offset by the weekend tentative settlement of a longstanding labour dispute at U.S. west coast ports that had backed up pork exports.
The USDA report said January beef stocks came in at 490.9 million lb., a record high for the month.
The government pegged January’s total chicken inventory at 730.1 million lb., up six percent from a year ago and a four-year high for January.
“Any time you get over 700 million lb. in poultry, it’s a lot,” said independent market analyst Bob Brown in Edmond of Oklahoma.
Ron Plain, a University of Missouri livestock economist, attributed the bulge in cold storage to the inability to move meat off the West Coast.
Pork likely felt the brunt of the impact because more of it is shipped outside the United States than other meat.
Cargo loading and unloading resumed full operations the day following the agreement between longshore workers and the ports.
However, it could take several weeks to clear the backlog, which could keep a lid on domestic meat prices until then, experts said.
Bouts of wintry weather from Chicago eastward made it difficult for packers to transport meat to their consumers and likely hurt meat consumption in hardest hit areas, Plain said.
As well, analysts said the U.S. dollar’s surge of more than 16 percent during the last nine months made U.S goods less attractive to foreign buyers, thereby exacerbating storage stocks.
